Investor In Focus - Guy Woodhatch
Everyone dreams of stepping back from work to travel around Australia, yet few are in the position to do so… Discover how Melbourne investor Guy Woodhatch and his young family achieved their dreams via their cashflow positive property portfolio.
Returns from a cashflow positive property portfolio supported Guy Woodhatch and his young family as they travelled around Australia, bringing to fruition a long-held dream. Realising as a teenager that working his entire life wasn’t an attractive prospect, Guy could see that investment and financial freedom went hand in hand. A long way from being able to start his own portfolio, Guy dove headfirst into research and worked towards creating the future he desired. Fortunate to meet someone equally devoted to building independent wealth, Guy and his wife Tamsin began their portfolio together - a rundown property providing a steep learning curve to success.
“We did everything wrong,” Guy says.
Set on a bigger block, the property’s subdivision potential took much longer to realise than they’d hoped when issues with the local council threatened to derail their plans. By renovating the existing dwelling as they waited for the subdivision to come through however, Guy and Tamsin were buoyed by the profits that lay ahead despite their immediate concerns.
“It seemed like a good process to build wealth,” Guy says.
With their property portfolio underway, Guy and Tamsin’s initial experience taught them the importance of building a good team. It’s key to new investors’ success, Guy says, and something he’d advise you start as soon as possible. “It takes a while to meet people you feel comfortable with.”
Moving on from the challenges presented by their first investment, Guy and Tamsin built their property portfolio with a buy, renovate and hold strategy, working to improve the value and get to cash flow positive as soon as possible. Now experienced renovators, they’d sworn to never live in a house under construction but a fixer-upper with huge potential meant a change of tune.
Finding what was declared an “uninhabitable” property in the leafy Victorian suburb of Hawthorn, Guy and Tamsin wanted to draw on capital from their investment portfolio to help with finance. Suddenly faced with eight properties to sell, they knew they needed a professional to act on their behalf. They called on the services of Advantage Property Consulting Buyers and Vendors Advocate Frank Valentic, who they’d previously bought and rented property throughout Melbourne.
“It would have been a nightmare without someone helping us,” Guy says. “Frank was able to negotiate really good deals by acting in a Vendor Advocate role.”
Having consolidated and reconfigured their portfolio, Guy and Tamsin now own five properties, with a view to undertaking larger projects into the future now they’re backed by a more secure asset base. They’re particularly interested in pursuing larger blocks of units and subdivisions which were harder to do early on but made possible now by the growth of their portfolio.
Backed by the strong belief Guy developed in his teens, he’s been able to steer the course through the tough times. When his fortunes took a turn for the worst with a business failure during the Global Financial Crisis it looked as though they’d have to sell down an investment property, but there were no buyers around. As the price dropped lower and lower, Guy called the sale to a halt.
“I knew we had to talk our way out of it,” he says.
With the knowledge and confidence that if they could just hold on the future would be better, Guy secured a refinance. The property later grew in value by over 70%, reinforcing his faith in bricks and mortar. Since that first investment in 2003, Guy says he’s reaped the benefits from connecting with like-minded investors, whose invaluable experiences outweigh unsubstantiated opinions from other parties.
“You’ve got to be careful taking advice from family and friends if they’re not directly investing in property.”
He also recommends doing as much independent research as possible, estimating he’s read 100s of books over the time and come across 1000s of different opinions. The more you know, the easier it is to work out the inconsistencies and protect yourself from being the next to feature in an investment horror story. Guy says new investors should learn as much as they can about finance, cash flow and capital requirements when building a portfolio. He adds that the difference of having a skilled financier in your corner could mean that extra property in your portfolio, making them a key player in your strategy.
A good Buyers Advocate to help source investment grade property and a good accountant is also crucial to maximising the tax effectiveness of your portfolio. Not yet ready to pack it all in and walk away from his day job, Guy’s confident they’re still on track towards financial freedom.
“It gives you the flexibility to make decisions about how you work,” Guy says. "" As our portfolio becomes more cash flow positive with growth over time, we’ll be able to transition out of employment and do more property.”